Case No. 1 of Coram. Shri. Azeez M. Khan, Member Shri. Deepak Lad, Member

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1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: / www. merc.gov.in Case No. 1 of 2017 In the matter of Petition of ASN Power Projects (P) Ltd. for refund of Commitment Fee and Infrastructure Clearance charges pursuant to withdrawal of its Biomass Power Project proposal and cancellation of Final Consent Agreement by Maharashtra Energy Development Agency Coram Shri. Azeez M. Khan, Member Shri. Deepak Lad, Member ASN Power Projects (P) Limited Petitioner Maharashtra Energy Development Agency Respondent Appearance For Petitioner For Respondent For Authorized Consumer Representative : Shri. Jagadish Farsinavis : Shri. H.D. Shinde : Dr. Ashok Pendse, TBIA ORDER Date: 10 October, M/s. ASN Power Projects (P) Limited (ASN), with its Administrative Office at 5th Floor, Babukhan Millenium Centre, Somajiguda, Hyderabad, Telangana State, hasfiled a Petition on 26 October,2016citing Section 86(1)(e) of the Electricity Act (EA), 2003 and Regulations 92,93 and94 of the MERC (ConductofBusiness )Regulations, The Petition seeks adjudication of dispute for returnof the Performance Guarantee Order in Case No 1 of 2017 Page 1

2 amount(commitment Fee) pursuant to the withdrawal of its proposal for setting up of Biomass Power Project and cancellation of the Final Consent Agreement by MaharashtraEnergy Development Agency(MEDA). 2. The Prayers of ASN are as follows: a. Commission may direct MEDA to refund Rs. 55,00,000 towards Commission fees and Infrastructure clearance along with interest at a rate at the Commissions discretion; b. For such other relief as this Court deem fit in the interest of justice, equity and good conscience. c. For Costs. 3. In its Petition, ASN has stated that: a) ASN had intended to setup a 10 MW Biomass-based Power Plant at Plot No. A - 27, MIDC Maregaon, Mul Growth Centre, Dist. Chandrapur, Maharashtra. b) ASN applied on 28 January, 2002 to MEDA for permission to set up the proposed Project, which was subsequently given by MEDA. c) Thereafter, ASN entered into the Final Consent Agreement with MEDA on 18 July, Under Clause 14, MEDA demanded a deposit of Rs. 5 lakh per MW, totaling Rs.50 lakh. Accordingly, ASN deposited Rs. 50 lakh with MEDA towards refundable Commitment Rs 5 lakh per MW in two installments of Rs 20 lakh on 6 February, 2008 and Rs 30 lakh on 28 February,2008. d) ASN initiated the Project execution works and achieved financial closure for the Project. It also floated inquiries for procurement of critical Boiler, Turbine and Generator (BTG) equipment. An Energy Purchase Agreement (EPA) was also entered into with the Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL).It has made substantial progress in implementation of the Project and has submitted the progress reports to MEDA from time to time. e) Because of the delay in getting the term loan disbursement from the lenders, ASN vide its letter dated 5 October, 2009 requested MEDA to refund the Commitment Fee of Rs. 50 lakh to enable it to release advance payments to the critical equipment suppliers to ensure further progress in Project implementation. Order in Case No 1 of 2017 Page 2

3 f) ASN has also deposited Rs.5 lakh with MEDA towards sanction of fresh Infrastructure Clearance vide its letter dated 29 July, However, against the Project s interest and without considering the situation and the progress made in Project implementation, MEDA issued a letter on 3 October, 2012 to ASN stating that the Projectis cancelled and that the charges paid by ASN are forfeited. g) Vide its letter dated 30 October, 2012, ASN replied to MEDA submitting the status of the Project and the efforts being made for its implementation. It sought extension of validity of the clearance for another 6 months, i.e., till 30 April, This request was made in the hope that the Commission would revise the prevailing tariff of Rs. 5.41/Unit, which has proven unviable for most of the operational Plants, from the next FY so that the lenders would get the confidence to support the Project and the activities could be taken up on a war footing. h) Vide its letter dated 6 November, 2012, MEDA gave unilateral notice to ASN that it had cancelled its consent as per the provisions of the Agreement dated 18 July, This is a clear injustice and error apparent in the face of Clause 21 of the Final Consent signed by both parties which provided that In case of any dispute regarding any clause in this Agreement, the matter shall be referred to MERC and decision given by MERC in the matter shall be binding on the both the parties. i) MEDA has accorded a Licence to another Project promoter - Greta Power Projects at the same location (i.e. at Mul) where ASN s Project was proposed. MEDA has also given 44 Licences/permissions to setup Biomass Power Projects in various Districts of Maharashtra. Out of these 44 Projects, only 17 Promoters have completed their Projects with the allotted capacities. The rest have not proceeded further in their proposals for various reasons. Some of the commissioned Projects have closed down due to accumulated losses because of unviable tariff rates. j) The Project commissioned in 2009 by ASN s sister concern M/s. Varm Biom Energy Ltd., a 10 MW Biomass plant in Bhandara District - is also among those Projects which experienced accumulated losses during the tenure of operations which have squeezed the finances of the Promoters. Given this situation in which the Biomass Sector is struggling, no lenders are willing to extend their support anymore. Hence, ASN was left with no option but to withdraw from its proposal to set up the Project. Vide its letter dated 24 May, 2013, ASN requested MEDA to refund its Commitment Fee of Rs. 50 lakh. Vide letter dated 14 February 2014, ASN again requested MEDA to release the Commitment Fee of Rs. 50 lakh after deduction as Order in Case No 1 of 2017 Page 3

4 per law. It has constantly corresponded with MEDA stating that it has withdrawn the Project proposal and asking it to return the Commitment Fee. k) Ultimately, MEDA replied on 22 July,2016 stating that the proposal for refund of Commitment Fee was referred to the Law and Judiciary Department, Govt. of Maharashtra, which had opined that the matter be referred to the Commission. l) ASN has filed the present Petition seeking directions to MEDA to refund the Commitment Fee. Only ASN has paid such a Commitment Fee plus an additional Rs. 5 lakh for Infrastructure Clearance, and this has not been collected by MEDA from any other Biomass Project Developer. 4. In its Reply dated 18 March, 2017, MEDA has stated that: a) Vide an Agreement dated 18 July, 2006, MEDA had granted permission to ASN to establish a 10 MW capacity Biomass Power Project at Maregaon Mul, District Chandrapur, subject to its terms and conditions. b) Under Clause 14 of the Agreement, ASN was required to deposit Rs.5 lakh per MW as a refundable Commitment Fee, aggregating Rs. 50 lakh for 10 MW capacity. ASN deposited this amount in two installments on 6 February and 28 February, c) Under Clause 16, ASN was required to commission the Project within 24 months from entering into an EPA with MSEDCL, and MEDA could extend the period of execution upon proper justification from ASN. The EPA was executed on 29 September, Thus, under the Agreement, ASN was to commission the Project by 29 September, d) Clause 17 provides that, if ASN fails to meet the time limit for commercial operation of the Project, it shall have to seek permission for time extension by depositing an Extension Fee of Rs. 50,000/- per MW, applicable for six months, along with justification. However, ASN failed to progress with the commissioning of the Project till e) Clause 21 provides that, in case of any dispute regarding any clause in the Agreement, the matter shall be referred to the Commission, whose decision shall be binding on both parties. f) In order to streamline the methodology for Biomass-based Projects and to reactivate old and incomplete Projects, MEDA at its 71 st Governing Body Meeting resolved to include Biomass Projects in the new methodology as per their development stages and, in that regard, declared an Amnesty Scheme dated 15 May, Order in Case No 1 of 2017 Page 4

5 g) Since ASN had failed to commission its Project till 2010 but showed renewed interest in it, MEDA agreed vide letter dated 15 May, 2010 to give it a further opportunity to complete the Project under the new methodology. ASN was also asked to submit an application for Infrastructure Clearance along with fees / charges and documents by 15 August, 2010, failing which the Project would not be considered for any approval under the new methodology. h) Vide its letter dated 29 July, 2010, ASN deposited Rs. 5 lakh towards fresh Infrastructure Clearance along with the Progress Report. However, since copies of the Work Order issued by ASN to the manufacturers for supply of material / equipment like boiler, turbine, condenser etc. were not submitted, vide letter dated 31 July, 2010 MEDA asked it to furnish these before 15 August, i) Since ASN failed to submit the necessary documents, MEDA vide its letter dated 3 October, 2012 again called upon it to submit satisfactory progress reports within 15 days and that, if ASN failed to do so, MEDA would be constrained to cancel the Project, which would result in forfeiture of the charges paid by ASN. j) Vide its letter dated 30 October, 2012, ASN again requested MEDA to extend the validity of the Infrastructure Clearance for a further period of six months upto 30 April, Since ASN failed to make any satisfactory progress in executing the Project despite a lapse of 6 years, MEDA vide its letter dated 6 November, 2012 cancelled its approval. k) Vide its letter dated 19 November, 2012, ASN set out the reasons for consideration. However, subsequently, vide letter dated 24 May, 2013, ASN decided to surrender the approval given to it by MEDA and requested MEDA to return the Commitment Deposit of Rs. 50 lakh along with accrued interest. l) Having regard to the aforesaid facts, MEDA s view is as follow: i) ASN had deposited the Commitment Fee of Rs. 50 lakh pursuant to the terms and conditions of the Agreement dated 18 July, 2006, which was to be refunded by MEDA without interest to ASN after submission of the evidence of acceptance of ASN s orders issued to suppliers for equipment, i.e. boiler, turbine and DG set, which ASN has not submitted till date. Vide its letter dated 3 October, 2012, MEDA informed ASN that, if the Project is cancelled, all charges paid by ASN shall stand forfeited. Therefore, in MEDA s opinion, the Commitment Deposit of Rs. 50 lakh is liable to be forfeited. ii) Under Clause 17 of the Agreement, ASN is liable to pay a fee of Rs. 50,000/- per MW for every extension of six months sought by it. ASN has sought extensions on 18 October and 30 October, 2012 right upto 30 April, Hence, ASN is Order in Case No 1 of 2017 Page 5

6 liable to pay extension Rs.50,000/- per MW for every extension of six months upto the date of cancellation of the approval. iii) As per the Amnesty Scheme dated 15 May, 2010, time was given upto 15 August, 2010 for submission of related documents. However, ASN failed to submit the required documents and satisfactory progress till the cancellation of the Project vide its letter dated 6 November, Hence, it was considered that ASN had availed the extended period of two years and, therefore, Rs. 50,000 per MW for every six months be recovered for the period of 24 months, i.e. Rs. 20 lakh. iv) As per the Amnesty Scheme, ASN was asked vide letter dated 15 May, 2010 to submit a fresh application with required documents and processing fee of Rs. 5 lakh by 15 August, Accordingly, ASN deposited Rs. 5 lakh in July, 2010, but failed to submit the documents to MEDA within the given time. Moreover, ASN did not give the status of any progress on the Project. Therefore, ASN was not eligible to avail the benefit of the Amnesty Scheme. The processing fee of Rs. 5 lakh deposited by ASN is non-refundable, and is hence liable to be forfeited. v) The Commitment Fee of Rs. 50 lakh deposited by ASN pursuant to Cl. 14 of the Agreement was to be refunded by MEDA without interest after submission of the documentary evidence of acceptance of ASN's orders to equipment suppliers for equipment. However, this was not complied with by ASN, and hence MEDA kept the amount on hold. Thereafter, ASN submitted its request to withdraw the approval and the Project stands canceled by MEDA s letter dated 3 October, vi) Clause 21 of the Agreement states that, in the event of any dispute between the Parties, the decision of the Commission shall be binding. If MEDA decides to forfeit the Commitment Deposit of Rs. 50 lakh and if ASN does not agree with it, ASN could refer the matter to the Commission. 5. The proceedings at the hearing held on 21 March, 2017 are summarized as follows: 5.1 ASN stated that: i) It had intended to set up a 10 MW Biomass-based Power Project at Mul, District Chandrapur. Accordingly, it applied to MEDA for issue of Licence. After MEDA s permission, ASN and MEDA entered into a Consent Agreement on 18 July, As per Clause 14, ASN deposited Rs. 50 lakh towards refundable Commitment Fee at Rs 5 lakh per MW in two instalments. It also paid an additional Rs. 5 lakh for infrastructure clearance to MEDA. Subsequently, ASN entered an EPA with MSEDCL. Order in Case No 1 of 2017 Page 6

7 ii) MEDA has issued 44 Licences to Biomass Projects in various Districts of the State. Only ASN has paid the Commitment Fee of Rs. 50 lakh plus additional Rs. 5 lakh for infrastructure clearance to MEDA. Of these 44 Projects, 18 Projects are under commissioning, as seen from MEDA s website, but have not paid any Commitment Fee nor been otherwise penalised. MEDA has given Licence to another promoter, Greta Power Projects, at the same location where ASN s Project was proposed. If MEDA had given ASN the same time as it gave to these other 18 Projects, ASN could have commissioned its Project. iii) MEDA has unilaterally given notice to ASN that it has cancelled the final consent as per the provisions of the Consent Agreement, which is a clear injustice and an error apparent on the face of Clause 21 of the Agreement. Clause 21 states that, in case of any dispute regarding any clause in the Agreement, the matter shall be referred to the Commission whose decision shall be binding. iv) In the above situation, when the Biomass Sector is struggling and no lenders are willing to extend support, ASN was forced to withdraw from the proposed Project, and has written to MEDA to return the Commitment Deposit of Rs. 50 lakh as MEDA has withdrawn the clearance. In these circumstances, MEDA may be directed to refund Rs.55 lakh towards Commitment Fees and Infrastructure Clearance charges. ASN does not now wish to pursue its claim for interest on these amounts, even though MEDA has been benefiting from interest on it for the last 9 years. 5.2 The Commission asked ASN why it did not approach it when MEDA canceled the final consent. ASN stated that MEDA had assured it orally that the Commitment Fees and Infrastructure Clearance charges would be refunded. 5.3 The Commission asked MEDA for its say on the issues of refund of the Commitment Fee (which was deposited for a specific purpose) and Infrastructure Clearance Charges since the Project was not commissioned and is not being pursued. MEDA stated that it has filed its Reply on 18 March, Considering the deemed extension of the Project by 24 months under the Amnesty Scheme, Rs. 20 lakh(at Rs. 50,000/MW) needs to be deducted from the Commitment Fee of Rs. 50 lakh. 5.4The Commission asked MEDA about the purpose of the Commitment Fee, which the MEDA Representative could not clarify satisfactorily. The Commission also asked MEDA regarding: Order in Case No 1 of 2017 Page 7

8 (i) (ii) (iii) the basis on which such Consent Agreements were formulated, and how many have been entered into by MEDA; the basis and criteria for deciding the amount of Commitment Fees, its legal sanctity and the basis of the dispute resolution Clause relating to the Commission in the Consent Agreement. 6. In its response dated 24 April, 2017, MEDA stated as follows: 6.1 The Agreement was formulated taking into consideration the preparedness of the Developer to setup the Biomass Project. However, it was noticed that some Developers had tried to trade the clearances given for the Project. In order to avoid misuse of clearances, MEDA had initiated the process of entering into Agreements with the Developers. After approval of the Director General, MEDA, these Agreements were formulated. 28 such Agreements have been entered into. 6.2 To ensure genuine players in this sector, MEDA had fixed Commitment Fees. The quantum of Commitment Fee was decided considering the charges being levied in other States, viz. Andhra Pradesh, Punjab, Gujarat and Karnataka. The Commitment Fee was approved in the 50th Governing Body of MEDA on 11 June, On 8 August, 2005, the Commission issued an Order ( Biomass Order ) [in Case No. 37 of 2003] regarding the Tariff and related dispensation for procurement of power from Biomass-based Generation Projects. According to this Order, monitoring of the fuel and its non-compliance is one of the responsibilities of MEDA. The collection area allotment is the other responsibility of MEDA. The purpose of the Consent Agreement and dispute resolution Clause was to make Project allotment and commissioning effectively and strictly according to the Commission s guidelines. With the approval of its Director General, MEDA prepared the Consent Agreement which included the dispute resolution Clause. Commission s Analysis and Ruling 7. ASN s proposal to set up a 10 MW Biomass-based Power Project at MIDC Mul, District Chandrapur was approved by MEDA in the background of the Commission s Biomass Order dated 8 August, Accordingly, ASN and MEDA entered into a Final Consent Agreement on 18 July, The relevant Clauses of the Agreement read as follows: 13. The Company/Promoter shall pay Rs. 50,000/- per MW as service charge to MEDA. Order in Case No 1 of 2017 Page 8

9 14. The Company/Promoter shall submit the refundable commitment fee of Rs. 5 lakhs/mw within three months from depositing the service charges to MEDA and the same will be refunded without interest to the Promoter after submission of the documentary evidence of acceptance of Promoter s Order issued on supplier for equipments viz. boiler turbine and D.G. set. 15. The Company/Promoter shall complete the financial closure within period of six months from the date of signing of the EPA. 16. The Company/Promoter shall commission the project within 24 months from the date of entering into Energy Purchase Agreement (EPA) with the Maharashtra State Electricity Distribution Company Ltd. (MSEDCL). MEDA reserves the right to extend the period of execution after receipt of proper justification from the promoter. 17. The Company/Promoter if fails to abide by the time limit mentioned above in initiating commercial operation of project as mentioned above, the Company/Promoter will seek the permission for extension of time limit from MEDA by depositing the extension fee of Rs. 50,000 per MW applicable for period of six months along with justifiable reason. 18. MEDA reserves the right to withdraw the approval if default in execution of the terms of the agreement is noticed. 19. MEDA will have right to issue clearance for setting-up additional biomass power project in the same district depending on the availability of surplus biomass for exploiting the total power potential of the respective district. 21.In case of any dispute regarding any clause in this Agreement the matter shall be referred to MERC and decision given by MERC in the matter shall be binding on the both the Parties. 8. Accordingly, ASN deposited Rs. 50 lakh (Rs. 5 lakh/mw x 10 MW) with MEDA as refundable Commitment Fee in February, It separately paid Rs. 5 lakh for Infrastructure Clearance. Following the Consent Agreement, ASN also entered into an EPA with MSEDCL in September, ASN has stated that, thereafter, it also achieved financial closure. It had floated enquiries with suppliers for procurement of the critical BTG equipment, but there was delay in disbursement of the term loans by the lenders. ASN has stated that there were issues with regard to the viability of the tariff approved by the Commission. Whatever be the case, ASN requested MEDA on 5 October, 2009 to refund the Commitment Fee of Rs. 50 lakh so that it could make advance payments to equipment suppliers, in the absence of term loan disbursement, but MEDA did not do so. Order in Case No 1 of 2017 Page 9

10 10. Presumably considering delays and implementation issues in other Biomass Projects also, MEDA approved an Amnesty Scheme in May, Under that Scheme, ASN paid Infrastructure Clearance charges in July, 2010, and MEDA asked it to submit the work orders for the Project by 15 August, However, ASN did not do so within that extended Amnesty Scheme period either. 11. On 3 October, 2012, MEDA wrote to ASN (referring to earlier letters and replies of 2011 and 2012, which are not on record) stating that it would cancel the Project and forfeit the charges paid unless a satisfactory progress report was submitted within 15 days. On 31 October, 2012, ASN sought an extension of 6 months upto April, 2013 stating that it was making efforts towards executing its Project but was facing difficulties. It had finalized its Engineering Consultancy, as intimated earlier; its sister concern s Biomass Project in Bhandara District was making losses and had to be shut down for some time, thus affecting the finances of its promoters; and that a more favourable tariff was expected from the Commission in the forthcoming Tariff Order which would give confidence to its lenders. However, on 6 November, 2012, MEDA cancelled its permission on the ground of unsatisfactory progress even after 6 years and citing the Consent Agreement terms. 12. Vide its letter dated 24 May, 2013, ASN sought to withdraw from the Project, and asked MEDA to refund the Commitment Fee of Rs. 50 lakh with interest. After several reminders, and in the background of the provision for dispute resolution in the Consent Agreement, MEDA replied on 22 July, 2016 that the Law Deptt., Govt. of Maharashtra had been consulted and had opined that the matter may be referred to the Commission. Hence this Petition. 13. The requirement for Biomass Project Developers to approach MEDA, the State Nodal Agency, prior to an EPA with a Distribution Licensee arises from the following responsibilities cast on MEDA by the Commission under the Biomass Order in Case No. 37 of 2003 (read with the subsequent Review Order in Case No. 37 of 2005): (i) (ii) Ensuring that Project planning takes into consideration adequate availability of biomass on long-term basis; Assessing the adequacy of the Project catchment area and the fuel procurement plans of Projects, and ensuring that there is no overlap; (iii) Providing confirmation in this regard to the Distribution Licensees, and final Project clearance to Developers for entering into EPAs with them; Order in Case No 1 of 2017 Page 10

11 (iv) Monitoring the extent of fossil fuel usage by Biomass Projects during their operation, and routing of applications for coal linkage through it; (v) Levying fees from Project Developers, which are not exhorbitant or prohibitive and have a relation with the services rendered. Under the Commission s subsequent Renewable Purchase Obligation Regulations of 2010 and 2016 also, the Commission has designated MEDA as the State Nodal Agency for accreditation of Renewable Energy Projects and other functions (including monitoring the usage of fossil fuel by Biomass Projects). 14. It is in this background that MEDA has put in place systems for discharging its functions, including a Consent Agreement, Infrastructure Clearance, and various fees and charges. The Biomass Order does not lay down the specific modalities. However, since they are a pre-condition for EPAs with the Distribution Licensees, the Commission would be concerned with these modalities and how they are enforced to the extent that they are not in keeping with the intent and purpose of the Biomass and other Orders and the role assigned to MEDA, or are unnecessary or onerous. As far as the Developers are concerned, they are hardly in a position to challenge the provisions of the Consent Agreement or other modalities, and have no option but to accede to them if they want to pursue their Projects. 15. In this context, the Commission notes that the Consent Agreement requires Developers to pay a Commitment Fee of Rs. 5 lakh per MW to MEDA. This is intended to ensure the seriousness and bonafides of the Project proposals, particularly since clearance of a Project at a particular location may restrict the entry of other players because of the limited availability of biomass in the same catchment area. MEDA has stated that the Commitment Fee was introduced long back, and is required in some other States also. Under Clause 14 of the Consent Agreement (quoted above) between ASN and MEDA, the Commitment Fee was refundable after submission of documentary evidence of the suppliers acceptance of orders placed by the Developer for the BTG equipment. Admittedly, ASN did not produce such evidence nor was it able to show satisfactory progress in execution of its Project. 16. Clause 14 of the Consent Agreement is clear as to the condition to be fulfilled for refund of the Commitment Fee. Whatever the reasonableness or otherwise of this provision, when enforcing it MEDA must give due regard to its intent and purpose, which is to ensure the bonafides of Project proposals so that the biomass potential in Order in Case No 1 of 2017 Page 11

12 the catchment area is not pre-empted and remains unutilized at the cost of other Projects in the pipeline; and also due regard to the circumstances of any default by the Project Developer. In the Commission s view, MEDA ought to have taken into account the following considerations which are on record and have not been contradicted by MEDA: (i) The ASN Project achieved financial closure, and the loan sanction was submitted to MEDA on 29 September, 2009; (ii) ASN entered into an EPA with MSEDCL; (iii) ASN s serious intent is further supported by its payment of Rs. 50 lakh as Commitment Fee and Rs. 5 lakh as Infrastructure Charges; (iv) Of the 44 Projects to whom clearances have been given in the State, only 18 Projects have been commissioned so far. In contrast to ASN, most, if not all, have apparently not paid Commitment Fees, nor has any action been taken against them for this default; (v) As regards whether ASN pre-empted the catchment area at the cost of other Projects in the pipeline, MEDA s website indicates that 3 of the 18 commissioned Projects are in Chandrapur District. Of these, the Project of Greta Power Projects is at the same location as the proposed ASN Project, in the Mul MIDC Area. Morever, the Greta Project was commissioned in 2012, even before the ASN Project was cancelled; (vi) The Biomass Project of ASN s sister concern, Varm Biom Energy Ltd., has been commissioned, though it has been facing financial difficulties affecting the promoters; (vii) MEDA itself put in place an Amnesty Scheme in 2010, presumably taking into account various difficulties faced by approved Biomass Projects resulting in Project delays; (viii) In 2009, ASN had intimated MEDA of the non-disbursement by its term lenders, and sought the return of the Commitment Fees which would help enable it to place orders on equipment suppliers with whom it had made enquiries. It was open to MEDA to cancel the Project permission at that stage itself or even earlier citing the terms of the Agreement, but it did not do so till 3 years later. Order in Case No 1 of 2017 Page 12

13 17. Considering these facts and circumstances, the Commission is of the view that it would be unreasonable and inequitable to deny ASN the refund of the Commitment Fees of Rs. 50 lakh. The Commission accordingly directs MEDA to return the refundable Commitment Fees of Rs. 50 lakh to ASN within a month. MEDA shall also refund Rs. 5 lakh in case the Infrastructure Clearance charges, which must bear some relation with the service provided, were paid twice. ASN has withdrawn its claim for interest on these amounts, which is in any case not warranted in the circumstances of this matter. 18. MEDA has suggested that, if at all, refund of the Commitment Fee may be made after deducting Rs. 20 lakh, i.e. Rs. 50,000 per MW for each six-monthly deemed extension for the 24 months from the renewed sanction in 2010 following the Amnesty Scheme till its cancellation in This claim is untenable in the facts and circumstances of this matter. Moreover, no such claim was made as and when it was purported to have arisen. 19. Clause 21 of the Consent Agreement (quoted above) provides that disputes be resolved by the Commission. However, the Commission has not approved nor was it consulted on that provision. That provision shall stand deleted, and all the signatories informed. However, the Commission expects MEDA to give due regard to the intent and purpose of the Agreements while enforcing their other provisions considering the facts and circumstances of individual Projects. The Petition of ASN Power Projects (P) Ltd. in Case No. 1 of 2017 stands disposed of accordingly. Sd/- (Deepak Lad) Member Sd/- (Azeez M. Khan) Member Order in Case No 1 of 2017 Page 13